China Pushes Convergence Again

Following the recent policy of push of the past two years to promote convergence and competition in telecoms and media, China's State Council now plans to accelerate the process. This should theoretically mean more cable operators will be able to offer broadband and telephony, while telcos will able to offer content over mobile and fixed networks.
 
In recent months, China's fragmented cable sector has been undergoing change as key players jockey for position amid the government's push for provincial level consolidation. Meanwhile, a number of leading cable operators, including in Shenzhen, Beijing and Jiangsu among others, have begun to rollout high speed Internet services often in partnership with a telco. The news should also positive for listed cable co. Beijing Gehua  (~3.8 mil. cable subs), which has faced challenges in developing two-way broadband and digital interactive services.
 
Telcos have seen some success in IPTV through revenue sharing partnerships with broadcasters, but none hold direct licences and often face local opposition.
 
According to Xinhua, from 2010 to 2012, the policy focus will be on exploratory trials to push two-way interactive television and telecoms serices with the emphasis on offering multi-play services through a single network and a creating a regulatory standard to legislate over such services.
 
From 2013 to 2015, the government plans to commercialize such services and create regulatory institutions to deal with network convergence. Currently, SARFT controls broadcasting and media industry regulation while the MIIT oversees telecoms and the Internet.